Journal of CENTRUM Cathedra. Vol. 02, Issue 02

URI permanente para esta colecciónhttp://54.81.141.168/handle/123456789/194727

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JCC Volume 2 - Issue 2 - 2009
  • Zen and Management Education Phillips, Fred Y; 1
  • Leveraging Champions to Build a Knowledge Management System for the Research and Development and Marketing Interface Caraballo, Ervin; 2
  • Economic Development and Its Effect on Income Distribution: Evidence from Australia Haque, Mohammed; 3
  • Multipliers of the Peruvian Economy 2002 Torres-Zorrilla, Jorge; 4
  • An Assessment of the Potential Capability of Banks in the United Kingdom Banks to Exploit Sociodemographic Change Chaston, Ian; 5
  • Unionized Oligopoly and Outsourcing Melkumian, Arsen V; 6
  • Foreign Direct Investment Patterns in Transition Economies: An Evolutionary Game - Theoretic Perspective of the 1990s Wooster, Rossitza B; 7

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      Unionized Oligopoly and Outsourcing
      (Pontificia Universidad Católica del Perú. CENTRUM, 2009) Melkumian, Arsen V.
      The interaction between labor unions and international competition has received a lot of attention. In the first decade of the 21st century, increasing number of companies in unionized oligopolistic industries has shifted production abroad. However, the issue of outsourcing in the context of a unionized duopoly has received little attention. In this paper, I model the option to outsource in the context of unionized labor markets in exporting industries. I show that if the inverse demand function is convex, then an increase in the foreign wage increases the utility of a wage neutral union. I find that if the domestic firm can credibly threaten to shift production abroad, then an increase in the outsourcing country’s wage may increase domestic profits if the union is labor-oriented.